Investing in Your Pension During Stock Market Uncertainty – Why Staying the Course Matters

With global markets rattled by renewed tariff tensions in the US, many investors are understandably concerned about the impact on their pensions. It’s never easy to watch your retirement savings fluctuate — particularly when the headlines are full of uncertainty.

But it’s essential to remember: pensions are a long-term commitment, and while markets can be turbulent in the short term, history shows they tend to recover.

This blog is for general information and does not constitute financial advice. If you’re unsure about what’s right for you, please contact us for personalised guidance. The value of investments can fall as well as rise, so you may get back less than you invested.

A Long-Term Outlook for Long-Term Goals

Your pension savings could span 40, 50 — even 70 years. During that time, it’s expected that you’ll encounter several periods of market volatility. But reacting to short-term noise can be more damaging than helpful.

Looking back at the 2008 financial crisis, the FTSE All-Share dropped by over 37% in just one month. A year later, the market was still down, but the recovery was underway — and within three years, it had returned to positive territory. While past performance isn’t guaranteed, this serves as a powerful reminder of the resilience of markets over time.

What’s Your Pension Doing Right Now?

If you're contributing to a workplace pension, chances are you're invested in a default fund — which is typically diversified across various regions and asset types. That means you’re not fully exposed to stock market swings.

These funds also tend to “lifestyle” as you approach retirement — gradually shifting your portfolio toward less volatile assets. It’s a great system, but it's still worth checking your current pension setup to understand exactly where your money is invested and how much risk you’re taking on.

Avoid Knee-Jerk Reactions

Tempting as it might be to reduce contributions or switch funds in a downturn, doing so can lock in losses and slow down recovery. In fact, continuing to invest during a market dip can offer long-term advantages — allowing you to buy more units at lower prices.

This approach, often referred to as "buying the dip," may help your portfolio bounce back stronger when the market recovers.

Approaching or Already in Retirement?

If you're nearing retirement or already drawing income from your pension, it’s wise to reassess your strategy:

• Review your portfolio: Is your asset mix aligned with your risk tolerance and income goals?

• Consider flexibility: Could you reduce withdrawals or delay accessing your pension until markets stabilise?

• Explore annuity options: The current market has made guaranteed incomes more attractive. For example, a 65-year-old with a £100,000 pension could currently receive up to £7,685 a year from a single life annuity with a five-year guarantee.

  
  

Inflation-linked annuities are available too, though they typically offer a lower starting income. You don’t need to annuitise your full pension at once — many retirees take a hybrid approach by annuitising in stages while keeping the rest invested.

Don’t Forget an Emergency Buffer

Especially in uncertain times, having cash set aside is crucial:

• If you’re in retirement, aim for one to three years’ worth of essential expenses in cash.

• If you’re still working, three to six months is typically sufficient.

  
  

This safety net can help you avoid withdrawing from your investments when values are temporarily down.

Stay Focused, Stay Diversified

There are no guarantees as to how global events will unfold. But staying calm, taking a long-term view, and keeping a well-diversified portfolio can help you weather short-term volatility — and position you for long-term success.

At Cleveden Park Wealth, we’re here to help you navigate uncertain times with confidence. If you're concerned about your pension or would like to review your retirement strategy, get in touch with our expert advisers today.